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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (48242)	1/11/2000 11:56:00 PM
From: scott bolio	Respond to of 50808

Front page Barrons on line TUESDAY, JANUARY 11, 2000 WEEKDAY TRADER The AOL-Time Warner merger could mean the revival of interactive TV -- and a boon to the equipment makers that enable it. Then there are the usual suspects, which seem to profit from any advances in Internet access. "Sun Microsystems and Cisco [Systems] are definitely going to benefit, because there'll be a lot of neat content that will brought on to cable," says Gerry Kaufhold, principal analyst with Cahners In-Stat. "Servers galore [are] going into AOL's points of presence." And mighty Microsoft has a deal with AT&T to put its Windows CE operating system in GI-manufactured set-top boxes. Kaufhold also looks for specialty chip makers like Texas Instruments, National Semiconductor, Analog Devices and STM Microelectronics (the big gun in chips for satellites and set top boxes) to do well. "All these guys are drooling over this, because every time someone merges, [the] market starts to heat [up and] more of their product starts to ship," he says. Programmable logic chips -- made by companies like Altera and Xylink -- should gain, too: Those chips send signals between different devices (see Weekday Trader, "Programmable Logic Stocks Become Tech Haven," May 10, 1999). Some less well-known names also could see some upside. They include C-Cube Microsystems (part of Harmonic), which owns digital compression company Divicom, and Wind River Systems, a maker of operating systems for set-top boxes. "This merger may effectively change the whole dynamic of what's happening in the industry if open access becomes a reality," says Patti Reali, senior analyst at San-Jose, CA-based Dataquest, a unit of the Gartner Group. "It sets the stage for some really dramatic rollouts when they get all the pieces of the puzzle put together," says Kaufhold. At 132 3/4 late Tuesday, Motorola changes hands at 43x First Call's expected 2000 earnings of $3.07 a share -- a nice discount to its estimated 50% earnings growth rate this year. And its P/E of 32x the $4.21 it's expected to earn in 2001 is considerably less than its 37% growth rate next year. At Tuesday's closing price of 33 7/8, Wind River is around 21% off the high of 42 13/16 that it set in December. It also trades at 55x expected earnings of 62 cents for the fiscal year ending January 2000. That's a premium to its 35% long-term earnings growth rate. But its P/E of 44x the 77 cents it expected to earn in fiscal 2001 is only 1.2 times that number, and is a discount to its five-year average P/E of 55x forward earnings. Similarly, at Tuesday's closing price of 84 1/8, Harmonic is 13% off its 52-week high of 96 1/2. But its 2000 P/E of 90x expected earnings of 93 cents is 1.6x its 56% earnings growth rate that year, and a nice discount to its average five-year forward P/E of 109x.